June 20, 2014
By Curtis Austin
In Florida, more than 300,000 students obtain their post-high-school education at career colleges. Many are from Central Florida, where 73,000 students choose to attend private, for-profit schools to gain skills necessary to change their lives through education and employment.
One of the best-kept secrets of higher education is that career schools have topped public institutions as the main producers of frontline talent. In 2012-13, career schools accounted for approximately 60 percent of all health-care and 60 percent of all computer and information-technology graduates in Florida. They accounted for 93 percent of cosmetology and 83 percent of culinary graduates.
Unfortunately, the U.S. Department of Education is promulgating a regulation known as "gainful employment" that would reduce postsecondary educational opportunities. The proposal would require graduates of career-oriented programs to meet arbitrary future income and student-loan debt-repayment thresholds. Programs failing the test would lose eligibility to participate in federal student-aid programs.
The regulation would hit the Orlando economy right where it lives. Orlando-area career-college programming is diverse, from in-demand skills areas such as medical assisting and information technology to highly specialized, niche employment fields such as digital animation and theatrical make-up and costuming.
The Department of Education has proposed the regulation as a way to protect students from unmanageable debt. The focus is right, but the solution is wrong. If implemented, this regulation would force many programs to close, creating a long-lasting and detrimental effect on students and businesses.
First, the regulation fails to address all student debt. Nearly 70 percent of student debt and more than half of student-loan defaults are attributed to students in traditional institutions. The way the regulation is crafted, degree programs at state colleges and universities are exempted.
Second, the rule fails to acknowledge the long-term value of education. A student loan may "pay off" more quickly for a registered nurse than for a schoolteacher, but both benefit tremendously from their education.
Third, gainful employment fails to recognize that the federal government is part of the problem. A Government Accounting Office report noted that the government made $66 billion from student loans in the past five years. This evidence flies in the face of the government's protests about debt default rates. Overcharging students just adds to the problem.
Better approaches exist to help students manage debt, including:
•Counseling individuals to budget their spending based on realistic income projections.
•Expanding income-based repayment programs so that graduates entering lower-paying fields are not penalized for their career choices.
•Adapting reforms to include student borrowers at all institutions.
•Limiting student loans to educational needs rather than the total amount students may be eligible for based on federal formulas.
•Reducing federal student-loan interest rates, lowering the risks involved in seeking education.
More than 100 Florida leaders, including Associated Industries of Florida, the Florida Hospital Association and the Florida Restaurant and Lodging Association, recently asked the Department of Education to drop its proposal.
With more than 200 area schools serving thousands of students, career colleges are a critical part of Central Florida's postsecondary landscape and its work-force development infrastructure. With so much at stake, let's find better ways to address the debt issue.
Curtis Austin is executive director of the Florida Association of Postsecondary Schools and Colleges, the state's private career colleges.